Stuyvesant v. Western Mortgage Co.

Mr. Justice Campbell delivered the opinion of the court. The specifications of errors assigned and discussed by counsel are, first, that the court improperly admitted in evidence the articles of incorporation of the plaintiff company, second, that the court erred in sustaining a demurrer to the second defense in the answer; third, that the court should have granted a nonsuit at the close of plaintiff’s testimony; fourth, that the court should have directed the jury to find for the defendant on the issue raised by the traverse of the affidavit in attachment; fifth, that the court should have admitted in evidence the deed of Harms to Mrs. Stuyvesant; sixth, that the court erred in giving certain instructions. Counsel for both parties concede that the articles of incorporation were not authenticated as required by our statute ; but the appellee contends that the ruling of the court admitting the articles in evidence was not prejudicial error, because, under a general denial which goes only to the merits of an action, the plaintiff’s capacity to sue is admitted; and that the incapacity of the plaintiff to sue must be taken advantage of by an affirmative defense in the answer specifically alleging the incapacity, because such a plea is dilatory in character, and in the nature of a plea in abatement under the old practice. As to this, the authorities are conflicting. Ontario State Bank v. Tibbits, 80 Cal. 68; Nat. Life Ins. Co. v. Robinson, 8 Neb. 452; Dietrichs v. L. & N. W. R. Co., 13 Neb. 43; Beach on Private Corps., sec. 869, and authorities cited; Pomeroy’s Rem. & Rem. Rights, secs. 697, 698, 708, 711; Bliss on Code Pleading (3d ed.), sec. 246 et seq. We need not decide this controverted question here, for, as the appellee contends, the evidence shows that not only did the defendant expressly agree with Harms to pay this indebtedness to the plaintiff company, but in his subsequent dealings with the company, in the way of paying interest to it upon said note, and in other respects, he repeatedly recognized the — 33 — plaintiff and dealt with it as a corporation, and, besides this, he is a privy in estate with Harms, and as Harms could not, in a suit brought by- the company on the note against him, be heard to deny or question the capacity of the plaintiff to sue as a corporation, the relation which the defendant sustains to Harms would likewise preclude him from raising a similar objection. Stoutimore v. Clark, 70 Mo. 471; Beach on Private Corporations, sec. 866; 2 Herman on Estoppel, sec. 822; 2 Morawetz on Corps. (2d ed.), sees. 774-778. So, whether we hold the defendant technically estopped to deny plaintiff’s capacity to sue, or merely that his dealings with the plaintiff constitute prima facie evidence, at least, of its .incorporation and its capacity to sue, the result would be the same, and the error of the court in improperly admitting in evidence the certificate of incorporation is not prejudicial error. The second and third assignments of error may properly be considered together. They relate to the main controversy in this case, which is over the construction of the bond for the deed. If the defendant’s agreement to pay the mortgage was made because of a promise by Harms which the latter never kept, then, in a suit by Harms against the defendant upon this promise, the plaintiff could not recover, for the consideration upon which the agreement rested failed. The rule should be the same when the plaintiff, for whose benefit the promise was made, brings a suit directly against the defendant, certainly in the absence of a showing that the plaintiff has acted upon the promise, and relying upon it, has changed its condition for the worse. The vital question, therefore, is, what was the agreement of Harms in relation to the conveyance of the property described in the bond for the deed? This particular mortgage included hot only lots 13, 14 and 15, which, at the request of the defendant, were conveyed directly to him by Harms, subject to the mortgage, but it included also lots 3, 5 and 6, which the defendant requested Harms to convey to — 34 — his wife. The amount of this mortgage and the mortgage of #800 mentioned in the agreement, together with the cash payment made by the defendant to Harms, constituted the full ■consideration which the defendant agreed to pay to Harms for all the lots sold. This mortgage, therefore, was part of .the consideration of their purchase price. The only respect wherein the defendant claims that Harms failed to perform .the covenants of his bond is that in the deed of lots 3, 5 and 6 to the defendant’s wife, the conveyance was made subject to the mortgage, whereas it should have been free and clear of all incumbrances. The ground upon which defendant bases his claim that three of the lots covered by this mortgage were to be conveyed free from the mortgage lien is •that, in the fourth paragraph of the agreement, it is -recited that Stuyvesant “ agrees to * * * assume the payment of a mortgage of #3.376.25 on said lots of 13,14 and 15, block 1.” We agree with counsel for appellant that the rights of these parties should be determined not merely from the recitals of the deeds of conveyance which were given in carrying out the terms of the agreement for sale, but that we should also look to the latter for determining the intention of the parties. We may also examine the agreement of the parties, whether expressed in one or more writings, for the purpose of ascertaining what object they had in view, and to this end may look, also, to the bond which Stuyvesant gave to Harms on December 1, 1886. From ■all these written instruments it appears that Harms desired to sell Stuj'vesant certain property. The price agreed upon was #12,410. Of this, #8,233.75 was paid in cash. The balance was represented by this particular mortgage and a smaller mortgage of #800, which Stuyvesant agreed to pajE The mortgage in question here covered not only lots 13, 14 and 15, but also lots 3, 5 and 6, and five other lots. But the construction sought to be put upon this agreement by the appellant is too narrow. The entire contract shows that what Stuyvesant really agreed to pay was the amount, of this mortgage, or, rather, the note secured by — 35 — this mortgage, which embraced not only lots 13, 14 and 15, but lots 3, 5 and 6. Merely describing the mortgage which the defendant agreed to pay as covering a portion only of the lots therein subject to its lien does not give to the defendant the right to insist upon a deed of the lots not mentioned as covered by the mortgage, but actually included therein, free from its incumbrance. The agreement of Harms was to convey the property free from all liens except the mortgage mentioned, and this particular mortgage constituted a lien, as an examination of the record would show, upon the lots which the defendant directed Harms to convey to his wife, as well as a lien upon the three lots conveyed by Harms to him. This covenant Harms carried out literally and according to its true spirit. Another part of-this bond for a deed provides that before Harms should be required to make a conveyance, Stuyvesant should “first make the payments and perform the covenants hereinafter mentioned.” Stuyvesant made the cash payments and paid the $800 mortgage. The mortgage for $3,376.25 was due at the time this agreement was executed, but Stuyvesant has not yet paid it. His own wrong in not paying this mortgage as he agreed prevented Harms from deeding any of the property covered by it free from its hen, and Stuyvesant should not be allowed to profit by his own wrong merely because, in response to his request, Harms conveyed this property before he could have been required to do so by the terms of the agreement, when Stuyvesant could at once free the lots conveyed to his wife by paying, according to the very terms of his covenant, the mortgage which constitutes the lien. There is another reason why this second defense is subject to the demurrer. It is a familiar principle that each defense of an answer must be complete in itself. The complaint alleges that the defendant accepted the deed from Harms to the property in controversy, placed the same upon record, and went into possession of the property under the deed. This allegation of possession is not denied in this second — 36 — defepse. Certainly, it' Harms should have sued the defendant on his agreement to pay this mortgage, the defendant could not be heard to allege that- Harms’ consideration for defendant’s agreement was not kept, and at the same time retain possession of the property, nor could defendant do the same in this action by the plaintiff. Gifford v. Father Matthew T. A. B. Soc., 104 N. Y. 139. While the language of the agreement is that plaintiff shall pay the mortgage, the real meaning o£ the covenant is that plaintiff shall pay the note which the mortgage secures,— for the discharge of the note is the only way to pay the mortgage, — the latter being only the incident, the note being the principal thing. In this view the cause of action sued upon is the overdue prrimissory note, and that was a good ground of attachment under our statute when this action was instituted. But if the cause of action should be held to be upon this written agreement, the latter is for the unconditional, absolute payment of a sum certain, and under the doctrine that that is certain which can be made certain, this agreement binds the defendant to pay, not only a sum certain, but within a certain time and to a certain pajme, so that upon it an attachment was permissible. The case of Hurd v. McClellan, 14 Colo. 213, held that an attachment bond was not a written instrument for the direct and unconditional payment of money. Hence, in a suit upon such a bond, an attachment could not issue. But that is entirely different from the agreement in this case. Schmucker v. Sibert, 18 Kan. 104; Drake on Attachments (7th ed.), 27 a. In view of our determination as to the nature of Harms’ agreement, the refusal of the court to admit in evidence the deed of Harms to the defendant’s wife could not have been prejudicial error, for that deed was merely evidence of the allegation in this second defense that the conveyance of lots 3, 5 and 6 was made subject to the payment of this mortgage, and, as we have already determined, this was in strict accordance with the agreement made by Harms. — 37 — An examination of the instructions given to the jury shows that the law was given by the court substantially in accordance with the views set forth in this opinion. There being no substantial errors committed by the court below, it follows that the judgment should be affirmed. Affirmed.